Question

scenario Juan and Maria Lopez wish to invest in a no-risk savings account. They currently have 530,000 in an account bearing 5.25 % annual interest, compounded continuously. The following options are available to them.​

Answer 1

The amount after three year is 617934.1302

Step-by-step explanation:

Complete question

A person places $530,000 in an investment account earning an annual rate of 5.25%, compounded continuously. Using the formula V = Pe^{rt}V=Pe rt , where V is the value of the account in t years, P is the principal initially invested, e is the base of a natural logarithm, and r is the rate of interest, determine the amount of money, to the nearest cent, in the account after 3 years

Solution

The formula for calculating compound interest is

`A = p (1 + (r)/(n))^(nt)`

Substituting the given values we get -

`A = 530,000 (1 + (5.25)/(100))^3\\A = 530,000 * ( 1+ 0.0525)^3\\A = 530,000 * ( 1.0525)^3\\A = 617934.1302`

The amount after three year is 617934.1302